$450M in CHIPS Act Funds Awarded for Indiana Chip Plant

A Korean semiconductor company has secured $450 million from the CHIPS and Science Act to support the construction of a state-of-the-art fabrication and research and development facility in West Lafayette, Indiana.

SK Hynix was awarded the funding by the Commerce Department for the new facility that will specialize in producing high-bandwidth memory chips, designed to handle large volumes of data and complex computations.

These chips are essential for powering high-performance computing and AI applications. They can process up to 1.18 terabytes of data per second — equivalent to streaming 230 full HD movies at once — making them crucial components in hardware like GPUs.

SK Hynix’s proposed chip plant is anticipated to come online at the beginning of the second half of 2028 and will create around 1,000 new jobs.

As part of its investment commitment, the Korean company would be eligible to claim tax credits of up to 25% on its investments.

In addition to the $450 million in direct funding, the company has access to up to $500 million in loans from the CHIPS Program Office.

Beyond its manufacturing plans, SK Hynix will work on future research and development projects with Purdue University, including working on advanced packaging solutions — a research area the U.S. government plans to spend up to $1.6 billion investigating.

Related:Commerce Department Awards $400M in CHIPS Act Funds to Boost Chip Production

“We are moving forward with the construction of the Indiana production base, working with the state of Indiana, Purdue University and our U.S. business partners to ultimately supply leading-edge AI memory products from West Lafayette,” said Kwak Noh-Jung, Sk Hynix’s CEO. “We look forward to establishing a new hub for AI technology, creating skilled jobs for Indiana and helping build a more robust, resilient supply chain for the global semiconductor industry.”

SK Hynix becomes the last name on an ever-growing list of semiconductor firms taking advantage of the financial incentives offered to them under the CHIPS and Science Act.

Billions of dollars in tax breaks and direct funding have been awarded to the likes of Samsung, Micron, Intel and Taiwan Semiconductor Manufacturing Company to entice them into expanding their U.S.-based chip production efforts.

Most recently, GlobalWafers was awarded $400 million to construct new wafer manufacturing facilities in Sherman, Texas and St. Peters, Missouri.

“Today’s historic announcement with SK Hynix would further solidify America’s AI hardware supply chain in a way no other country on earth can match, with every major player in advanced semiconductor manufacturing and packaging building or expanding on our shores,” said Secretary of Commerce Gina Raimondo.

Related:US Invests $1.6B in Next-Gen Semiconductor Packaging Research

This story first appeared in IoT World Today's sister publication AI Business.